LET TO BUY MORTGAGES

For homeowners

LET TO BUY MORTGAGES

For homeowners

What Are Let-To-Buy Mortgages?

Let-to-buy mortgages allow existing homeowners to raise money to buy another property, before they’ve sold their first property.

Who Are Let-To-Buy Mortgages For?

There are many cases when a homeowner may want to move to a new house, while still owning their first. For example, a couple may decide to move into a house together, yet one of the pair already has a house. Rather than go through the process of selling the first house and buying somewhere new, the first house is rented out. The new home may be purchased with a let-to-buy mortgage on the first property.

What Is The Difference Between Let-To-Buy And Buy-To-Let Mortgages?

Let-to-buy and buy-to-let mortgages sound similar, and, in fact, are similar — but there’s a crucial difference. Buy-to-let mortgages are for people who want to buy a house and then make it available to rent by other individuals. With let to buy, the person already owns the home they’re going to rent out. They’ll use the mortgage loan to buy another property, where they’ll live.

What Do You Need For a Let-to-Buy Mortgage?

All mortgages are subject to requirements, and let-to-buy mortgages are no different. In order to qualify for one, a person must be aged between twenty-five and seventy-five, have a deposit of around 20%, and have a strong financial standing, though different lenders have different rules.

What Are The Advantages?

There are many benefits of a let-to-buy mortgage. It provides more options for the homeowner, for starters. It’s useful if a homeowner wants to move but is struggling to find a buyer for their existing property. It can also release equity that’s tied up in the home, as well as generate future income. The rent from the first home can cover the costs of the mortgage for the second, for example. And though it’s not the most important part of the whole thing, it should also be said that many people like the challenge of becoming a landlord.

How Do You Get the Best Rates?

The best let-to-buy mortgage rates can be obtained by owning a property where there’s a demand for rental housing. The rate that’ll you pay will be tied to the level of risk of the home; if it’s an area where demand outweighs supply, and it can get a high rental income, then the property owner will get better rates. And as always, things like the applicant’s personal financial history, background, employment, and so forth will also form part of the rate calculations.

Though they’re slightly more complicated than traditional mortgages, in the right circumstances this type of mortgage can be a stress-busting tool for people who want to move, or own two properties. Thanks to let to buy mortgage lenders, homeowners don’t need to wait for someone else to buy their home before moving up the property ladder.

Active Mortgage specialise in Let-to-Buy Mortgages. Contact us to speak to one of our experts to discuss what is available to you.

These articles are for information only and no advice should be conferred from the content within. Please seek independent financial advice prior to taking any action.

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IMPORTANT INFO

Think carefully before securing other debts against your home. Your mortgage is secured on your home, which you could lose if you do not keep up your mortgage repayments.

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